The aim would be to market the brand as a quality product, Bloomberg reports, citing sources.
BYD's ambition is also to enter other major international motorsport competitions, which are currently dominated by European and American car brands.
Developing a new Formula 1 car normally takes several years, and running a competitive car can cost around $500 million per year.
BYD recently dethroned Tesla as the world's largest electric car manufacturer after several years of major investments to gain market share in Europe, Latin America and other major markets.
